Tag: dip

Oil prices fell along with weak stock markets on Thursday, but trading was tepid ahead of a meeting by producer group OPEC that is expected to result in a supply cut aimed at draining a glut that has pulled down crude prices by 30 percent since October. International Brent crude oil futures were down 7 cents, or 0.1 percent, at $61.49 per barrel. Traders said oil prices were being weighed down by weak global financial markets, which saw stock markets tumble on Thursday. Led by Saudi Arabia, OPEC

Oil prices fell along with weak stock markets on Thursday, but trading was tepid ahead of a meeting by producer group OPEC that is expected to result in a supply cut aimed at draining a glut that has pulled down crude prices by 30 percent since October.

U.S. West Texas Intermediate (WTI) crude futures were at $52.66 per barrel at 0140 GMT, down 23 cents, or 0.4 percent, from their last close.

International Brent crude oil futures were down 7 cents, or 0.1 percent, at $61.49 per barrel.

Traders said oil prices were being weighed down by weak global financial markets, which saw stock markets tumble on Thursday.

Since early October, crude oil has lost around 30 percent of its value amid surging supply and fears that an economic downturn will erode fuel demand.

The Organisation of the Petroleum Exporting Countries (OPEC) is meeting at its headquarters in Vienna, Austria, on Thursday to decide its production policy.

Led by Saudi Arabia, OPEC’s crude oil production has risen by 4.1 percent since mid-2018, to 33.31 million barrels per day (bpd).

Oil output from the world’s biggest producers – OPEC, Russia and the United States – has increased by a 3.3 million bpd since the end of 2017, to 56.38 million bpd, meeting almost 60 percent of global consumption.

The increase alone is equivalent to the output of major OPEC producer United Arab Emirates.

Russia, a major oil producer but not a member of OPEC, will meet with the producer cartel on Friday to discuss production levels, and it is widely expected that a supply cut will be agreed.

“Markets…believe the production cut deal will be in range of 1-1.3 million bpd,” ANZ bank said on Thursday.

Twitter shares have lost altitude. “I actually am pretty constructive on Twitter at current levels,” Mark Newton, technical analyst at Newton Advisors, told CNBC’s “Trading Nation” on Thursday. A 4 percent pullback from the current price above $31 would take Twitter shares down to around $30, a level it has not broken below since October. Twitter currently trades at 36 times forward earnings, down from its peak of nearly 60 times in June. Gibbs says she prefers Facebook or InterActive Corp over

The social network has been in a tailspin since the summer, losing more than one-third of value after hitting 52-week highs in June.

One technical analyst foresees a bounce.

“I actually am pretty constructive on Twitter at current levels,” Mark Newton, technical analyst at Newton Advisors, told CNBC’s “Trading Nation” on Thursday. “The stock is down about 35 percent since June. However, this followed a time when the stock almost tripled in price last year, and so it’s actually been consolidating a bit.”

Twitter advanced more than 47 percent in 2017, its best year since going public in 2013. Even with its autumn lull, its shares are up 30 percent for 2018.

“I’m a buyer of the stock on pullbacks. Ideally right down there at $28 to $28.50 for me is a good level but I would start really nibbling on a 4 percent move,” he said.

A 4 percent pullback from the current price above $31 would take Twitter shares down to around $30, a level it has not broken below since October. A drop to $28 would mark an 11 percent decline.

“I like it technically and I’m buying with the expectation that it’s going to rally back to the mid- to high $30s,” added Newton.

But Erin Gibbs, portfolio manager at S&P Global Market Intelligence, says there are no signs a bottom is in for Twitter yet.

“When you look at these valuations, there’s a lot of room for them to drop and they’ve been dropping for over 18 months on a valuation basis as their profit growth slows further and further. Combine that with negative news and I really don’t see a stop just yet for the drop in the stock,” Gibbs said on “Trading Nation” on Thursday.

Twitter currently trades at 36 times forward earnings, down from its peak of nearly 60 times in June. It has an elevated valuation compared with the 17 times multiple on the XLC communications services ETF.

“It’s trading pretty close to its target price so there’s definitely room for it to drop further, and in general just growth momentum stocks are out of favor right now,” Gibbs added.

Gibbs says she prefers Facebook or InterActive Corp over Twitter as a way to play the interactive media space.

In terms of sectors, Healthcare is the best performing, up 0.10 percent, with all other sectors in negative territory. Utilities and Banks are at the top of the worst performing sectors, down nearly 1 percent. Brexit progress continues to dominate European headlines on Thursday. There is a meeting of EU leaders on Sunday at which they are expected to endorse the draft Brexit deal. In Asia, markets were in mixed territory with China stocks mostly negative amid ongoing trade tensions between Beiji

In terms of sectors, Healthcare is the best performing, up 0.10 percent, with all other sectors in negative territory. Utilities and Banks are at the top of the worst performing sectors, down nearly 1 percent.

Brexit progress continues to dominate European headlines on Thursday. U.K. Prime Minister Theresa May discussed the current state of Brexit negotiations with the President of the European Commission, Jean-Claude Juncker, on Wednesday.

May said progress was being made on a draft agreement on future EU-U.K. relations (a separate agreement from the Brexit deal) but Spain has threatened to vote against the draft Brexit deal if it is left out of talks on the future status of Gibraltar, a British territory on Spain’s southern coast. There is a meeting of EU leaders on Sunday at which they are expected to endorse the draft Brexit deal.

Meanwhile, Italy’s budget continues to cause a headache for Europe too. With Italy refusing to budge on its big spending plans for 2019, the European Commission announced on Wednesday that it is starting disciplinary measures against Italy which could result in it being fined. Investors are also keeping an eye on global trade developments.

In Asia, markets were in mixed territory with China stocks mostly negative amid ongoing trade tensions between Beijing and Washington. Investor attention is focused on a meeting between Presidents Xi Jinping and Donald Trump at an upcoming G-20 meeting in Buenos Aires on November 30.

In business news, investors will be keeping an eye on a Nissan board meeting to discuss the ousting of the carmaker’s Chairman Carlos Ghosn after his shock arrest earlier. Ghosn has been accused of alleged financial misconduct. Ghosn is also the chairman and chief executive of Renault so its shares are under pressure Thursday.

Oil prices dipped on Thursday after U.S. crude inventories increased to their highest level since December 2017, fueling more concerns of a possible oversupply in markets.

U.S. financial markets are closed on Thursday for the Thanksgiving public holiday and there are no major earnings Thursday. Data releases include preliminary euro area consumer confidence numbers for November.

Patience and persistence in our monetary policy are still needed, says ECB’s Draghi 2 Hours Ago | 02:05Mario Draghi, the president of the European Central Bank (ECB), hinted at the possibility of inflation not rising as quickly as expected due to euro zone firms dealing with a slew of uncertainties. “If firms start to become more uncertain about the growth and inflation outlook, the squeeze on margins could prove more persistent,” Draghi said at a banking conference in Frankfurt Friday. “This wo

Mario Draghi, the president of the European Central Bank (ECB), hinted at the possibility of inflation not rising as quickly as expected due to euro zone firms dealing with a slew of uncertainties.

“If firms start to become more uncertain about the growth and inflation outlook, the squeeze on margins could prove more persistent,” Draghi said at a banking conference in Frankfurt Friday.

“This would affect the speed with which underlying inflation picks up and therefore the inflation path that we expect to see in the quarters ahead.”

Draghi’s speech was generally positive about the region and he reiterated that the central bank’s massive crisis-era bond-buying scheme is still due to be wound down at the end of this year. He said there was no reason why the current expansion in the euro area — which is now in its fifth year — should abruptly come to an end, adding that the economic cycle was resilient.

German bond yields rose on Friday on the back of these comments. The country’s 10-year bond yield rose to session highs at 0.376 percent, extending earlier rises, according to Reuters.

“Buy the dip.” “As long as the economy remains strong and you get earnings growth, then equities are going to continue to rise. In other words, I don’t see any particular panic or … to me, the risk-reward isn’t necessarily screaming that you need to buy the dip,” Chintawongvanich said Tuesday on CNBC’s “Trading Nation.” In other words, investors are taking a more methodical approach to buying stock market dips, rather than swooping in to buy weakness. I’d say, strategically, if you’re invested i

It’s become a tried-and-true tactic on Wall Street, an approach equity investors could rely on since the financial crisis as stocks have climbed for the better part of nine years.

But some say that’s no longer the viable strategy it once was as the market environment shifts and the Federal Reserve remains on its path to normalizing monetary policy.

Pravit Chintawongvanich, equity derivatives strategist at Wells Fargo, said that while he isn’t seeing any indication of knee-jerk “panic” in the marketplace that would signal getting out of stocks, investors can’t assume buying every dip will pay off.

“As long as the economy remains strong and you get earnings growth, then equities are going to continue to rise. But you’re going to make your money in equities the same way you traditionally do, which is from rising earnings, dividends and buybacks. In other words, I don’t see any particular panic or … to me, the risk-reward isn’t necessarily screaming that you need to buy the dip,” Chintawongvanich said Tuesday on CNBC’s “Trading Nation.”

In other words, investors are taking a more methodical approach to buying stock market dips, rather than swooping in to buy weakness. Chintawongvanich believes the market could very well rally over the next year, but in the short term there may not be a “buyable dips” as investors contend with factors like the rise in real rates and the competition equities could face from climbing Treasury yields.

“I’m not necessarily bearish on the market. I’d say, strategically, if you’re invested in equities, then stay invested in equities. But to me, I don’t see this as a tactical point to necessarily add exposure,” he said.

One Wall Street brokerage just did an about-face on Netflix, telling clients that the stock’s 27 percent decline from its July high represents an attractive buying opportunity. In a rare move, Buckingham Research raised its rating two notches to buy from underperform for Netflix shares, saying that while it was previously cautious on its “elevated” stock price, it still believes it is a top-notch option. “We have always viewed Netflix as the continued top streaming category winner,” analyst Matt

One Wall Street brokerage just did an about-face on Netflix, telling clients that the stock’s 27 percent decline from its July high represents an attractive buying opportunity.

In a rare move, Buckingham Research raised its rating two notches to buy from underperform for Netflix shares, saying that while it was previously cautious on its “elevated” stock price, it still believes it is a top-notch option.

“We have always viewed Netflix as the continued top streaming category winner,” analyst Matthew Harrigan wrote Monday. We are “increasing our price target to $406 from $349, providing 31 percent upside, with the stock’s 27 percent decline from its July 12-month high being the primary upgrade catalyst.”

Netflix is down more than 9.9 percent over the last three months and is off nearly 27 percent from its 52-week high of $423.21 amid a technology stock rout. Shares of Facebook, Amazon and Google-parent Alphabet are each down more than 8 percent so far this quarter.

Roku’s stock presents a compelling buying opportunity, according to Wedbush Securities, which upgraded the video streaming company to outperform from neutral on Thursday. Analyst Michael Pachter told clients in a note that the recent pullback in the company’s shares offered savvy investors a good entry point.

Every Federal Reserve policy maker backed raising interest rates last month, according to September meeting minutes released on Wednesday. Rising interest rates are normally negative for gold since they could boost the dollar and also increase the opportunity cost of holding non-yielding bullion. It is finding support from increased risk aversion among market participants, as reflected in falling stock markets, and from additional ETF (exchange traded fund) inflows.” Holdings of the SPDR Gold Tr

Gold prices edged up on Friday, the metal’s third week of gains as weaker stock markets spurred investors to seek refuge in bullion, which also gained technical momentum after scaling major milestones.

Spot gold added 0.14 percent to $1,226.66 per ounce. The metal gained 0.7 percent this week, after hitting a 2-1/2-month high at $1,233.26 on Monday.

U.S. gold futures were settled down $1.40 at $1,228.70.

“Gold has done really well to hold up here, given the Fed was really hawkish. Sensitivity to equity markets is helping gold at the moment,” Macquarie commodity strategist Matthew Turner said.

“We are entering a new paradigm, where any further rate hike could be a sign that the economy is overheating a bit, which should be more positive for gold and problematic for equities.”

Every Federal Reserve policy maker backed raising interest rates last month, according to September meeting minutes released on Wednesday.

Rising interest rates are normally negative for gold since they could boost the dollar and also increase the opportunity cost of holding non-yielding bullion.

In wider markets, European stocks tumbled again as a showdown between Italy’s government and the European Union loomed.

“Today’s attempt by gold to lastingly exceed the 100-day moving average looks promising. If it succeeds, technical follow-up buying should push the gold price further up,” Commerzbank analysts said in a note.

“At the same time, gold is resisting the firm U.S. dollar. It is finding support from increased risk aversion among market participants, as reflected in falling stock markets, and from additional ETF (exchange traded fund) inflows.”

Holdings of the SPDR Gold Trust, the largest gold-backed ETF, have gained 2.5 percent in the past two weeks.

The recent sell-off in global stock markets has boosted gold’s appeal, as some investors see it as a safe store of value during political and economic uncertainty.

This comes with a bullish $375 price target (15 percent higher than its current trading price). In the last three months, analysts have published seven buy ratings and one hold rating. Meanwhile the average analyst price target stands at $350 (7 percent upside potential). Stifel Nicolaus analyst Scott Devitt (Track Record & Ratings) is now out with the stock’s highest price target, at $2,525. These analysts have a $2,195 price target on AMZN (19 percent upside potential).

Illumina is a global leader in genomics, grappling with questions like ‘what causes cancer cells to mutate.” Its sequencing technologies enable us to understand genetic variations in health, disease and drug response.

Canaccord Genuity’s Mark Massaro (Track Record & Ratings) has just reiterated his buy rating on the stock. This comes with a bullish $375 price target (15 percent higher than its current trading price).

The analyst recently wrote: “No fault of its own, ILMN is down 21% since reaching $372/share just 9 days ago. We would buy ILMN right here, as ILMN, the dominant leader in sequencing, is powering huge population sequencing projects around the world at a scale never seen before.”

Overall, this stock earns a strong buy consensus rating on TipRanks. In the last three months, analysts have published seven buy ratings and one hold rating. Meanwhile the average analyst price target stands at $350 (7 percent upside potential).

Amazon (AMZN)

E-commerce giant Amazon has slipped recently. The shares are down 8 percent in the last month, but the fundamental outlook remains as strong as ever.

Stifel Nicolaus analyst Scott Devitt (Track Record & Ratings) is now out with the stock’s highest price target, at $2,525. That is 38 percent above from current levels. Devitt also added the stock to the firm’s elite Select List, bumping out Alibaba in the process.

“We are replacing Alibaba with Amazon on the Stifel Select List in light of greater near-term optimism for Amazon, an uncertain China macro environment, and the opportunity created by recent AMZN price movement” Devitt wrote on October 11.

As Devitt noted, Amazon is a leader in two large and rapidly growing markets, e-commerce and cloud services. Moreover, its developing ad business is well-positioned to deliver strong revenue growth over the intermediate to long term.

“Strong momentum in the higher-margin cloud services and advertising business are elevating the near/intermediate-term margin trajectory for the company” the Stifel analyst told investors in the report.

The bank’s widely followed analyst Marko Kolanovic said the dip was largely technical and followed the same selling template as the Dow’s massive drop in February. Russell 2000 even a bigger drawdown), we think that the current setup favors buying the dip,” Kolanovic, J.P. Morgan’s global quantitative and derivatives strategy analyst, said in a note to clients Friday. “A risk to the thesis is that market volatility continues to move higher which would result in further outflows from Volatility T

J.P. Morgan is telling its clients to make the most of the market’s massive sell-off this week, as it’s almost over.

The bank’s widely followed analyst Marko Kolanovic said the dip was largely technical and followed the same selling template as the Dow’s massive drop in February.

“Given that equity indices already experienced comparable declines to February (and e.g. Russell 2000 even a bigger drawdown), we think that the current setup favors buying the dip,” Kolanovic, J.P. Morgan’s global quantitative and derivatives strategy analyst, said in a note to clients Friday. “A risk to the thesis is that market volatility continues to move higher which would result in further outflows from Volatility Targeting funds.”

February fears were largely similar to those of this week: rising yields and the Fed’s more hawkish stance. U.S. stock markets struggled to regain footing Friday after a 1,300-point drop earlier in the week.

“This risk is now balanced, and can turn into a positive impact, i.e. option hedgers buying equities,” Kolanovic said.